The credit card limit assigned to you is an important facet of the instrument, and it is one that can change over time. In fact, the limit that you get at the start is often quite low, with some issuers offering cards with a sub-₹1 Lakh limit. But this is something you can improve as your financial standing gets better.
Having a higher credit card limit is something you should strive for, as it can help you get more value out of your credit card. Here are some smart tips that can help you raise the limit of your card.
Understanding Credit Card Limits
As the name suggests, the credit card limit is the limit of usage that the issuer sets on your credit card. In simple terms, it refers to the maximum amount that you are allowed to spend. Issuers set this limit based on the following factors:
- Your age and place of residence
- Your current credit mix
- Your income and employment
- Your credit history and score
- Your credit utilisation ratio
- Your debt-to-income ratio
Smart Tips to Raise Your Credit Card Limit
Here’s how you can increase the limit:
Request Your Issuer Directly
The easiest way to boost your credit limit is to request your credit card issuer directly. They will assess various factors to see if you’re eligible for an upgrade. To enhance your chances for a credit limit raise, provide evidence and put forward a strong case.
Here are some tips:
- Get your employment details updated if you’ve changed a job or received a salary raise
- Pay off your credit card dues in full and before the due date
- Clear your other financial obligations, such as loan EMIs, utility bills, etc., on time
- Check your credit report to see if your credit score has gone up, and negotiate for the increase on the basis of your improved scores
Increase Your Credit Score
With a high score, you can negotiate with the issuer for an increase in the credit limit. This is because a high score indicates that you are a creditworthy individual. In fact, passing certain credit score thresholds may automatically qualify you for a higher limit.
Generally, issuers consider a score above 700 as good and with such a score, the chances of an increase in your credit limit are high.
Clear Your Monthly Dues on Time
Timely payment of your credit card bills is an important point to pay attention to. When you clear your dues on time, it shows that you have a stable source of income and you’re a responsible borrower.
Remember to pay the bill in full, even though paying only the minimum amount is an option. Not paying off the full dues results in interest charges on the balance amount, which can be difficult to repay after a few months. Additionally, clearing your bills in full is a sign of responsible behaviour.
Maintain a Low Credit Utilisation Ratio
The credit utilisation ratio, as the name suggests, refers to the amount that you utilise from the total credit limit assigned to you. Keeping this ratio on the lower side, ideally below 35%, can help you build a solid financial profile. This shows that you have stable finances and you’re not highly dependent on credit.
Apply for a New Credit Card
An effective way to get a high credit limit is by applying for a new credit card with a new issuer. You may qualify for certain offers from a different issuer, and these could have a better limit. What’s more, on completing the credit card activation process, some newer card variants have perks such as:
- Lower interest rates with nil APR periods
- Zero annual renewal fees for a lifetime or a limited period
- Attractive welcome or joining benefits
Benefits of a High Credit Card Limit
Having a high credit limit offers these advantages:
- You enjoy a higher financial flexibility to meet your various expenses such as medical expenses, utility bill payments, etc.
- With enhanced purchasing power, you can carry out expensive purchases without maxing out your credit card
- A higher credit limit can help you lower your credit utilisation ratio and boost your credit score steadily
- You can get better terms in your future credit applications since a high credit limit reflects creditworthiness
Ideally, you should scout for offers and only apply if the credit card limit offered is suitable. One issuer to consider when looking for a premium metallic credit card is the One Credit Card. Backed by powerful tech and an advanced mobile app, you get a comfortable credit card limit, alongside a number of perks.
These include hassle-free EMI conversion facilities, offers on shopping and dining, up to 5X rewards on your top two spending categories and more. This is also a metal card and it has zero joining and annual renewal charges, along with no charges for redeeming your reward points. Apply now to get started.
